Court Approves McLeod Reorganization

Updated April 8, 2002 12:01 a.m. ET

The U.S. Bankruptcy Court for the District of Delaware approved McLeodUSA Inc.'s reorganization plan filed at the end of January. The Cedar Rapids, Iowa, communications-services company said it expects the plan to become effective April 16 and to eliminate $3 billion of high-yield debt and about $325 million in interest costs. Terms of the plan include the sale of McLeodUSA's directory-publishing business, a cash investment by Forstmann Little & Co. for new common stock and warrants, and the conversion of existing preferred and common shares into new common shares. The plan also calls for the repayment of term...